According to the report, the market for banknotes is continuing to grow at approximately 5%/yr, driven mostly by population and per capita GDP growth. However, within that growth there are areas of concern. The banknote substrate market is suffering oversupply, which is squeezing prices. Some of the more exposed suppliers that are not supported by significant local indent may struggle to survive. Banknote paper in particular is being commoditized.

“Oversupply is expected to continue until 2019–2021, during which time product differentiation and efficiency will be key survival strategies in the commercial sector,” says Paul Howland, author of the report. “In the government sector there is uncertainty around the efficiency and rate of growth of government-owned, mold-made paper production compared to demand, especially in India and China. This makes it difficult to estimate the severity and exact period of oversupply.”

Banknote print is expected to grow at the same rate as the substrate market, at 5%/yr, and is less affected by oversupply.

The passport business is growing at about 4% per year, driven by increasing international travel and strong per capita growth, especially in Asia. The majority of issued passports are now in the ePassport format, which will become increasingly prevalent by 2020.

The ID card market is growing at around 5% per year. ID cards are becoming more technically sophisticated, says the study, both at the simple ID card level and at the eID level, with an increasing amount of security components to combat counterfeiting.

Paper driving licenses are rapidly disappearing as cards and chip cards (eDL) take their place. Driving license cards are growing at a rate of around 3%, well ahead of global population growth. eDL is likely to continue to grow, although privacy concerns may be holding up eDL rollout in some areas. Cost is another key issue.

The study sets out to explain the technology behind a wide range of security documents, with particular focus on the substrate, laminated structures, and inks used. It identifies the major market drivers and cutting-edge developments that will determine the future direction of the industry to 2020.

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